CEO • Author • Speaker
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CEO • Author • Speaker
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Interactive Quarterly: Going Beyond The Banner (2,582 words - Interactive Quarterly - July 8, 1996)By Cathy Taylor Second-Generation Web Services Promise Advertisers A Faster, Smarter Experience As advertising banners on the World Wide Web have grown more ubiquitous, they have also come in for more criticism -- from consumers and advertisers alike. Many pundits have proclaimed banners dead, literal tombstone ads that symbolize a strategy gone wrong. At the first general meeting of the Internet Advertising Bureau, held in New York in June, interactive executives stressed that getting "beyond the banner" will be crucial to the fate of advertising in the new media industry. In the second half of this year, we'll see how far "beyond" the banner ad form the Web can go. Through a combination of proven marketing ideas and technological advancement, several firms are working at new ways to deliver ads. They're not simply building a better banner. Imagine a Web world in which ads pop up in accordance with your favorite breakfast food, your most nagging ailment or whether you are a PC or Mac user -- in other words, where individuals go through life accompanied by a unique advertising experience based on their tastes. In this world, advertising is gently profferred to you, and therefore less unpleasant and intrusive; more important, you receive free e-mail or other benefits in return. No doubt, this smoothly targeted world will repel some users with its prying knowledge of their habits. But for advertisers, it represents the marketing equivalent of the pearly gates: a way to reach precisely those consumers who wish to be reached. The new advertising models developed by the companies that follow range from targeted prize giveaways to ad-supported e-mail to hybrids of broadcast and on-line technology. Despite their varied business plans, they tend to have one thing in common: They take into account, in both language and principle, the need to deliver better on the promise of the medium to a skeptical yet curious advertising community. Juno Online Services From a sleek new office tower only steps from New York's Times Square, Charles Ardai can survey the riot of billboards and flashing signs outside. Just as they shout the joys of unadulterated consumerism, Ardai is hoping that Juno can produce and deliver ads that will be welcomed into the home, rather than rejected as junk e-mail. As president of Juno Online Services, Ardai is betting that what the masses really want out of interactivity is free electronic mail. Certainly, advertisers want a way into the interactive world. "The Web wasn't really designed to carry ads," Ardai says. "That doesn't mean that it's terrible at advertising." To him and to D.E. Shaw & Co., the investment bank backing the venture, Juno's way in is better. For one, Ardai says, his product can give advertisers full reach and frequency across the media buy. And it can tell advertisers precisely who's seeing their ad. Juno works like this: Subscribers load a software disk onto their computer and get a simple user interface to send e-mail effortlessly. There's no cost to the user; all that's required to get a lifetime of free electronic postage is the completion of a questionnaire detailing "interests, hobbies and tastes." Along with providing certain demographic information, Juno subscribers agree to subject themselves to ads. Ardai emphasizes that ads on the service are not attached to individual pieces of mail. The banners, which rotate at the top of the screen while the user goes through the mail, link to more information about the product or service but not to the Web site itself, since Juno is not a full Internet-access service. Each user is also exposed to two full-screen "showcase ads" that appear while the service boots up and shuts down. Juno's ad rates are 6 to 10 cents per impression for banner ads and 8 to 12 cents for premium showcase ads. Ardai's goal: to create a mass medium that can produce the sort of audience numbers advertisers continue to crave. "The business that will be successful is the one that will have access to millions of eyeballs," he contends. (See chart, page 26, for data on the services' reach to date.) FreeMark Communications Doug McFarland, executive vice president and general manager of Juno's crosstown rival, FreeMark, works out of a corner office in the same East Side skyscraper that houses Ammirati Puris Lintas. The former Arbitron executive, who is fond of saying that "all advertising begins and ends with research," is leading FreeMark's advertiser-supported e-mail effort. Its plan is to pull on-line-resistant categories, such as packaged goods, into the interactive marketing fold. The service, which like Juno launched in April, already boasts such traditional marketers as RJR Nabisco. FreeMark Mail aims to be a service that Aunt Susie, but maybe not her HTML-loving son, would love. It even features a mailbox graphic that opens to divulge e-mail when a user logs on. Juno and FreeMark resemble one another in many ways. Both ask customers to fill out a questionnaire of consumer preferences before they sign on, and both employ advertising banners that link to more information about the product being advertised. But there are significant differences as well. One is how ads are delivered. While Juno argues that ads should never be attached to individual pieces of e-mail, FreeMark takes the opposite approach. "For the period a consumer is reading his or her mail, there is no other ad message available," McFarland says. "The advertiser has complete Ômind share' of a targeted consumer for some period of time -- no conflicting, competitive messages, no flashing banners, just the single message." The targetability allows FreeMark to charge a fairly high cost per impression. While untargeted banners on the Web can cost around 2 cents per impression, McFarland says advertisers have been willing to pay 12 to 14 cents per exposure with FreeMark. Interactive Imaginations At Interactive Imaginations, a new media firm in New York's Flatiron district, desk-bound workers crouch intently over their screens, creating an atmosphere not unlike that of the green eye-shade accountants and garment seamstresses who occupied the area generations ago. These are the Webmasters and content creators for Riddler.com, a gaming Web site that ingeniously plugs advertising into what is one of the Web's most interactive experiences. Greg Stuart, a former Wunderman Cato Johnson new media executive, sits in a windowless office, planning marketing strategy for the two-year-old company. "Riddler is a marketing matchmaker," Stuart says. "We match the right consumer with the right advertiser at the right time." Consumers may only be marginally aware of the sales pitch while they play. They come to the site for its games, including crossword puzzles and trivia contests, some versions of which can be played over the Internet with other Riddler members. Advertisers offer the prizes, ranging from a Toyota RAV4 to the Encyclopedia Britannica and Microsoft software. Visitors to the site register to play for free, telling Riddler only minimal information such as address, gender and which Web browser they use. Then players are transported into a world with its own currency. A Riddler starts with a fixed number of "riddlets," paying them out to play each game. In return, upon winning a game, a user is awarded a certain number of prize "caps." The more caps a Riddler has, the better the potential prizes. The encyclopedia, for example, may cost tens of thousands of caps; the Toyota is worth close to two million. That's a lot of trivia. Advertising is woven throughout this playland. The caps are like teeny advertising banners; those won toward the Toyota, for instance, carry the car maker's logo. The site also uses what are known as "interstitial ads": full-page screens that pop up while the Riddler player is waiting for a game to be loaded onto the site. Riddler advertisers can target their messages, since players can add "riddlets" by coughing up more demographic details. The service charges advertisers a relatively steep 25 cents per full-page view. The rationale: Not only do Riddler members see actual ads, as opposed to smaller advertising banners, but the interstitial ads result in a 100 percent click-through rate, since every Riddler player is exposed to the full ad. Agents Inc. The concept might strike some as creepy: the thought of having a high-tech concierge -- or a digital version of a clingy college roommate -- know everything about you. The founders of Agents Inc., based in Cambridge, Mass., believe differently. They've given the intelligent agents that roam their ambitious, personalized, interactive community the name Firefly, described in some dictionaries as a "relationship-loving" insect. Firefly's agents, whose craft is honed through a mix of selected demographic and cultural preferences in movies and music, take the Riddler concept one step further. By divining whether members prefer, say, Hole to Santana, each Firefly agent delivers its "owner" progressively more targeted entertainment content, even helping them build on-line relationships based on their affinities. (Within several mouse clicks of telling Firefly my preference for The Beatles, Joni Mitchell and Neil Young, it suggested I might also like The Pixies and Miles Davis, both of whom I had listened to in the past 24 hours.) Firefly uses the same principles for its advertising. "The sponsor is clearly defined as a sponsor, but they are also a part of the community," explains Doug Weaver, vice president of advertising sales, who works out of New York. Just as Firefly members judge content, thus forming a database of the likes and dislikes of the Firefly community, members are also asked to rate the banners, which gives them a sense of ownership over the marketers (see story, page 24). Tell the Firefly site that politically correct U2 is your favorite band, and in a flash a banner for Amnesty International, one of the group's pet causes, strings itself across the bottom of the site. "We can not only target an ad toward people who like the Lemonheads, but toward people who should like the Lemonheads," says Weaver. This pinpoint precision does come at a cost. Weaver charges 10 cents per impression for the privilege. Assuming the site succeeds -- the number of subscribers is currently at 120,000 and growing -- Agents Inc. plans to disperse its technology to other places on the Web. Last month, it signed a deal with search engine Yahoo! to employ the technology on that site. PointCast Inc. Funny, it doesn't look much like TV. But as Anna Zornosa, vice president for sales, demonstrates its news and information product on her laptop, she emphasizes that PointCast is really a broadcast medium. While the technical specs can be daunting, the PointCast Network is one of the only advertising vehicles on the Web that can easily repurpose TV commercials, and one of the few broadcasters to reach people while they're at work. PointCast is delivered free of charge to users' PCs in the background, much like the popular "flying toasters" and other screen savers that run while monitors are idle. Each user picks "channels," such as sports, weather and news, to customize their version of PointCast. Someone who wants to know the weather report for the Hamptons, follow the Los Angeles Dodgers, keep track of AT&T's stock and pick up celebrity gossip can select the data from various sources. PointCast has contracts with The Boston Globe, Los Angeles Times and Time Warner's Pathfinder, among others, to include their content. PointCast servers shovel the info to subscribers' PCs at hourly intervals throughout the day, giving PointCast most of the immediacy of the Internet without eating up expensive on-line time. "This is a second-generation Internet product," says Zornosa. Because users look at downloaded content, rather than grab it off the Internet themselves, PointCast can transmit full-motion video more easily than live Web sites. While stock quotes or sports scores might scroll across the bottom of the screen, a continuous loop of commercials plays in a frame in a corner. To provide content, all advertisers need do is supply footage that translates well as a commercial (without audio at this stage). The video is prepared for use on PointCast by processing it through Macromedia Director: no muss, little creative fuss. Six advertisers signed up for a free PointCast trial earlier this year as "corporate channel" sponsors. Four of them -- Fidelity, Quarterdeck, Saturn and EDS -- have renewed and will pay PointCast $200,000 apiece for the last half of 1996 (Prodigy and Fox did not re-up). New advertisers, who buy less prominent 30-second ads, will pay $50,000 per month in the fourth quarter with a guarantee of 20 million impressions. PointCast will soon launch SmartAd, software that allows advertisers to tailor when an ad runs depending on variables such as one-week-only sales. The Cupertino, Calif.-based company is also working with the Audit Bureau of Circulations to set up a customized auditing system. The service already seems to have impressed its Silicon Valley peers. In April, it won the award for Best Internet Application from C|Net. FreeLoader Inc. If PointCast has a direct competitor, it's FreeLoader, an off-line Web service launched in May. FreeLoader has barely started to approach advertisers, who will be its prime (and possibly only) revenue source. That didn't stop Individual Inc., a Burlington, Mass.-based technology outfit, from spending $38 million to buy FreeLoader's potential last month. Like Netscape Navigator and Microsoft's Internet Explorer, FreeLoader plans to build market penetration by offering its software at popular Internet sites. FreeLoader customers will use the software to surf the Web for them, downloading their favorite Web sites while they get some sleep, go to the office or get a manicure. The service eliminates messy surfing problems, such as server crashes, interminable downloading waits and the tedious process of hanging out while one's Internet connection slowly moves from one site to another. Moreover, FreeLoader editors keep track of what they consider to be the best sites in 14 general categories such as weather and sports. "We're the VCR and TV Guide of the Internet," says Frank Babbitt, vice president, sales and marketing, for the Washington, D.C.-based company. Just more Internet hype? Perhaps, but the service does seem to address what a recent Georgia Tech study said were the three biggest problems on the Internet: speed, finding sites and organizing them. In theory, with all of those arduous tasks taken care of by FreeLoader, the product's users enjoy a seamless off-line Internet experience, sped up because the information is accessed from the computer's hard drive rather than the balky Internet. As with PointCast, FreeLoader's off-line delivery may help it woo advertisers. Marketers can sponsor any of FreeLoader's 14 categories for $20,000 per month, buying banners to link to almost anything: a page of product information, a repurposed TV commercial, or even the advertiser's Web site, since the software allows dial-up access to the Internet. FreeLoader doesn't have its ducks in quite as neat a row as PointCast; it has yet to pick a third-party auditor and cannot guarantee impressions. Babbitt says the initial response is encouraging. Of the 50,000 people who downloaded the software in its first month, half have been converted into FreeLoader users. "What we're trying to do is make the Web fast and easy for everybody," he explains. If such services can, in fact, make the Web as fast and easy as TV or magazines, then the next problem "beyond banners" will be at hand: how to make ads that people truly want. Copyright © 1997 ASM Communications. All rights reserved. |
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